Preview
FILED: WESTCHESTER COUNTY CLERK 10/01/2018 05:13 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 10/01/2018
EXHIBIT 27H
FILED: WESTCHESTER COUNTY CLERK 10/01/2018 05:13 PM INDEX NO. 60767/2018
NYSCEF DOC.
9/12/2018 NO. 198 State says RECEIVED
no to quid NYSCEF:
pro quo 10/01/2018
NEW YORK REAL ESTATE NEWS
NEW YORK OTY REAL ESTATE NEW5
August 2011 Issue
State says no to quid pro quo
New opinion says brokerages can't give special treatment to lawyers who feed them title-insurance busi
By Catherine Curan | July28,2011 06:41PM
. "These In
A law
aiming to prevent improper quid pro quos for title insurance agents ni,o,r.o our,n
. resultwas a p
just got a new set of teeth - a furor in the toim.i......no
sharp causing already embattled.n.,
Luigi
industry.
In late May, the Office of the General Counsel of the state's Insurance Department issued
"recommended"
whether it's legal for a residential brokerage to place lawyers on lists,
to homebuyers, in exchange for those lawyers
referring
clients to the brokerage's title
The answer was a no. The state ruled that this kind of quid pro quo
resounding agency
state law. As a result, brokerages are now prohibited from
rewarding lawyers for
using
"punishing"
title agency, or those who don't
by removing
them from recommended lists
industry
sources
say
that lawyers who failed to refer back business to the firms were o
lists.) Those who violate the law will now be slapped with a $1,000 fine or five times th
financial inducement, whichever is larger.
While the law has been on the books since the 1970s, this new opinion
interpreting
it
far-reaching
consequences for the industry, which has seen more and more title insurance
partner with real estate firms in recent years.
"These inside, preferred deals have hindered our market for years, and the end result
interest,"
that often closed an eye to title issues and conflicts of said Luigi Rosa
attorney
counsel to the independent Manhattan title-insurance provider Loranca Settlement Se
Title insurance executives, those not affiliated with brokerage firms, said the
especially
the field.
playing
The new rules "will take
away the
slightly
unfair advantage [brokerages with affiliated
purchased,"
companies] had to influence where title insurance was said Marc Lawrence,
FILED: WESTCHESTER COUNTY CLERK 10/01/2018 05:13 PM INDEX NO. 60767/2018
9/12/2018 Statesays no to quid
pro quo
NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 10/01/2018
Smaller, independent titleinsurance companies, by contrast, typically get referrals from other real estate
professionals such as attorneys, mortgage bankers or mortgage brokers.
As affiliatedbusinesses became more common, the question of referrals between them turned into a hot
topic. But it'srecently reached a boiling point, as the slump in residential sales has sharpened competition
for titleinsurance fees.
It'slegal for brokerages to refercustomers to their affiliatedtitle agents, as long as the titleagency also gets
a significant portion of itsbusiness from several other sources.
lists"
Still,discomfort with "recommended has been growing for years among attorneys, who have ethical
concerns about being pressured to use certain titleagents in exchange for being on the lists,according to
Denise Ward, president of the Mamaroneck-Harrison-Larchmont Bar Association.
In the last few years, members have approached her about the issue with increasing frequency, Ward said,
noting that conditional referrals are a violation of the federal consumer protection law called the Real
Estate Settlement Procedures Act. Lawyers also worried about being sued for malpractice, which could
happen ifan attorney uses a titleagency solely to keep referrals flowing, because that could mean putting
the lawyer's interests ahead of clients'.
Now, many attorneys are relieved that the state has clarified the rules. "Ithelps attorneys who don't want to
company,'"
be put in thisbox of,'you're insisting I use your title said Ward.
field,"
As faras titleinsurance agents are concerned, the new opinion "reinforces the idea of a level playing
said Robert Treuber, executive vice president of the New York State Land Title Association, the industry's
local trade organization.
The news may not be as welcome to big real estate firms and their titleagencies. PDE Title did not respond
to requests for comment. Skyline issued a statement saying the insurance department's opinion simply
comply."
"restates a very long standing position of the Insurance Department, with which we fully
"[It]does not impact our business because we have always complied with and will continue to comply with
law,"
New York itsaid. Chris Meyers, the chief operating officerof Houlihan Lawrence, meanwhile, said his
firm's titleinsurance Thoroughbred
affiliate, Title,already gets more than half itsbusiness from buyers
who are not working with a Houlihan broker. Meyers acknowledged that Houlihan has recommended
attorneys lists,but insisted the listsare not about quid pro quo.
period,"
"Attorneys are on our lists because they provide great legal representation, said Meyers. "We expect
choice."
only that attorneys respect a buyer's request to use Thoroughbred ifthat isthe buyer's
https://therealdeal.com/issues_articles/state-says-no-to-quid-pro-quo/ 2/3
FILED: WESTCHESTER COUNTY CLERK 10/01/2018 05:13 PM INDEX NO. 60767/2018
9/12/2018 Statesays no to quid
pro quo
NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 10/01/2018
https://therealdeal.com/issues_articles/state-says-no-to-quid-pro-quo/ 3/3
Preview
FILED: WESTCHESTER COUNTY CLERK 10/01/2018 05:13 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 10/01/2018 EXHIBIT 27H FILED: WESTCHESTER COUNTY CLERK 10/01/2018 05:13 PM INDEX NO. 60767/2018 NYSCEF DOC. 9/12/2018 NO. 198 State says RECEIVED no to quid NYSCEF: pro quo 10/01/2018 NEW YORK REAL ESTATE NEWS NEW YORK OTY REAL ESTATE NEW5 August 2011 Issue State says no to quid pro quo New opinion says brokerages can't give special treatment to lawyers who feed them title-insurance busi By Catherine Curan | July28,2011 06:41PM . "These In A law aiming to prevent improper quid pro quos for title insurance agents ni,o,r.o our,n . resultwas a p just got a new set of teeth - a furor in the toim.i......no sharp causing already embattled.n., Luigi industry. In late May, the Office of the General Counsel of the state's Insurance Department issued "recommended" whether it's legal for a residential brokerage to place lawyers on lists, to homebuyers, in exchange for those lawyers referring clients to the brokerage's title The answer was a no. The state ruled that this kind of quid pro quo resounding agency state law. As a result, brokerages are now prohibited from rewarding lawyers for using "punishing" title agency, or those who don't by removing them from recommended lists industry sources say that lawyers who failed to refer back business to the firms were o lists.) Those who violate the law will now be slapped with a $1,000 fine or five times th financial inducement, whichever is larger. While the law has been on the books since the 1970s, this new opinion interpreting it far-reaching consequences for the industry, which has seen more and more title insurance partner with real estate firms in recent years. "These inside, preferred deals have hindered our market for years, and the end result interest," that often closed an eye to title issues and conflicts of said Luigi Rosa attorney counsel to the independent Manhattan title-insurance provider Loranca Settlement Se Title insurance executives, those not affiliated with brokerage firms, said the especially the field. playing The new rules "will take away the slightly unfair advantage [brokerages with affiliated purchased," companies] had to influence where title insurance was said Marc Lawrence, FILED: WESTCHESTER COUNTY CLERK 10/01/2018 05:13 PM INDEX NO. 60767/2018 9/12/2018 Statesays no to quid pro quo NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 10/01/2018 Smaller, independent titleinsurance companies, by contrast, typically get referrals from other real estate professionals such as attorneys, mortgage bankers or mortgage brokers. As affiliatedbusinesses became more common, the question of referrals between them turned into a hot topic. But it'srecently reached a boiling point, as the slump in residential sales has sharpened competition for titleinsurance fees. It'slegal for brokerages to refercustomers to their affiliatedtitle agents, as long as the titleagency also gets a significant portion of itsbusiness from several other sources. lists" Still,discomfort with "recommended has been growing for years among attorneys, who have ethical concerns about being pressured to use certain titleagents in exchange for being on the lists,according to Denise Ward, president of the Mamaroneck-Harrison-Larchmont Bar Association. In the last few years, members have approached her about the issue with increasing frequency, Ward said, noting that conditional referrals are a violation of the federal consumer protection law called the Real Estate Settlement Procedures Act. Lawyers also worried about being sued for malpractice, which could happen ifan attorney uses a titleagency solely to keep referrals flowing, because that could mean putting the lawyer's interests ahead of clients'. Now, many attorneys are relieved that the state has clarified the rules. "Ithelps attorneys who don't want to company,'" be put in thisbox of,'you're insisting I use your title said Ward. field," As faras titleinsurance agents are concerned, the new opinion "reinforces the idea of a level playing said Robert Treuber, executive vice president of the New York State Land Title Association, the industry's local trade organization. The news may not be as welcome to big real estate firms and their titleagencies. PDE Title did not respond to requests for comment. Skyline issued a statement saying the insurance department's opinion simply comply." "restates a very long standing position of the Insurance Department, with which we fully "[It]does not impact our business because we have always complied with and will continue to comply with law," New York itsaid. Chris Meyers, the chief operating officerof Houlihan Lawrence, meanwhile, said his firm's titleinsurance Thoroughbred affiliate, Title,already gets more than half itsbusiness from buyers who are not working with a Houlihan broker. Meyers acknowledged that Houlihan has recommended attorneys lists,but insisted the listsare not about quid pro quo. period," "Attorneys are on our lists because they provide great legal representation, said Meyers. "We expect choice." only that attorneys respect a buyer's request to use Thoroughbred ifthat isthe buyer's https://therealdeal.com/issues_articles/state-says-no-to-quid-pro-quo/ 2/3 FILED: WESTCHESTER COUNTY CLERK 10/01/2018 05:13 PM INDEX NO. 60767/2018 9/12/2018 Statesays no to quid pro quo NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 10/01/2018 https://therealdeal.com/issues_articles/state-says-no-to-quid-pro-quo/ 3/3